It was a week of downward momentum for the gold price.
The yellow metal neared the US$3,400 per ounce level on Monday (June 23) as investors reacted to the weekend’s escalation in tensions in the Middle East, but sank to just above US$3,300 the next day.
The decline came as US President Donald Trump announced that Israel and Iran had agreed to a ceasefire. While the ceasefire has not gone entirely smoothly, with Trump expressing displeasure about violations, the news appeared to calm investors.
Gold’s safe-haven appeal took another hit toward the end of the week, when Trump said late on Thursday (June 26) that the US had signed a trade deal with China. Although details remain scarce — China’s commerce ministry confirmed the arrangement, but said little else — the gold price dropped on the news, closing Friday (June 27) at about US$3,274.
It was a different story for other precious metals this week.
Silver enjoyed an uptick, rising as high as US$36.79 per ounce before pulling back to the US$36 level. Whether it can continue breaking higher remains to be seen, but many experts are optimistic.
In fact, Randy Smallwood of Wheaton Precious Metals (TSX:WPM,NYSE:WPM) said that right now he’s perhaps more excited about silver than he is about gold. Here’s how he explained it:
There’s not a lot of new production coming on stream, just because most silver comes as a by-product from lead, zinc and copper mines — more than half of silver. And we’re just not seeing the investment into the base metals space that we need to sustain that production and grow that production.
As excited as I am about gold, I think silver’s got a few more fundamentals behind it that make it a pretty exciting time to be watching silver … silver’s got some catching up to do with respect to what gold’s done over the last few years.’
Watch the full interview with Smallwood for more on silver, as well as gold and platinum.
Speaking of platinum, it was also on the move this week, rising above US$1,400 per ounce.
The move has turned heads — despite a persistent supply deficit, platinum has spent years trading in a fairly tight range, and it hasn’t crossed US$1,400 since 2014.
Recent trends supporting platinum’s move include a shift toward platinum jewelry due to the high cost of gold, as well as larger platinum imports to the US earlier this year when tariff uncertainty was heating up. At the same time, miners have faced challenges.
‘This has led to tight forward market conditions,’ said Jonathan Butler of Mitsubishi (TSE:8058), ‘with a deep backwardation across the curve.’ In his view, these conditions will continue providing support for the precious metal in the coming weeks.
Bullet briefing — Gold repatriation, Rule Symposium
Germany, Italy to repatriate gold?
Germany and Italy are facing calls to bring home gold stored in the US.
According to the Financial Times, politicians and economists in the two countries are pushing for repatriation as a result of global geopolitical uncertainty, as well as concerns about Trump’s potential influence on the Federal Reserve as he continues to criticize Chair Jerome Powell.
‘We are very concerned about Trump tampering with the Federal Reserve Bank’s independence. Our recommendation is to bring the (German and Italian) gold home to ensure European central banks have unlimited control over it at any given point in time’ — Michael Jäger, Taxpayers Association of Europe
The news outlet calculates that German and Italian gold held in the US has a total value of about US$245 billion. Market participants agree that it would be a blow to relations with America if the countries were to bring their gold home at this time.
At least for now they seem unlikely to do so — although Italy’s central bank hasn’t commented, Germany’s Bundesbank said it sees the New York Fed as ‘trustworthy and reliable.’
Send your questions for the Rule Symposium
The Rule Symposium runs in Boca Raton, Florida, from July 7 to 11, and I’ll be heading there to interview Rick Rule, as well as Adrian Day, Lobo Tiggre, Andy Schectman, Dr. Nomi Prins and more.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
